Are Non-Competes Enforceable in Vermont?
Last updated: 2026-10-07 · Verified against the statutes 2026-10-07
Enforceable if reasonable
No statute; courts enforce reasonable non-competes
Vermont has no general non-compete statute. Courts enforce a covenant that protects a legitimate business interest and is reasonable in its restrictions. Continued at-will employment can support a non-compete signed mid-employment, unless the employer acts in bad faith (for example, by firing the employee soon after signing).
Check a non-compete
Answer a few questions; the result cites the statute behind each point. Rules verified 2026-10-07. Saved only in your browser.
Thresholds are measured differently by state (salary, cash compensation, W-2 box 1).
Enforceable if reasonable
Vermont enforces non-competes that protect a legitimate business interest and are reasonable in time, geography and scope.
- Vermont: No statute; courts enforce reasonable non-competes.
Other Vermont rules to check
- If a court finds it too broad: No settled rule we could confirm.
General information, not legal advice. Enforceability also depends on the exact wording, the employer's legitimate interest and the facts; talk to an employment lawyer before relying on it.
Vermont non-compete rules
- Statute
- No general non-compete statute — court decisions govern.
- Signed mid-employment
- Yes - continued employment was held sufficient consideration (Summits 7, Inc. v. Kelly, 2005 VT 97), absent employer bad faith.
- Overbroad covenants
- No settled rule we could confirm
Recent and pending changes
Pending: H.205 (2025-26), which would ban employee non-competes, was recommitted to the House Commerce and Economic Development Committee on March 13, 2026 and has not passed either chamber.
Federal law
There is no federal ban on employee non-competes. The FTC's 2024 Non-Compete Clause Rule (16 CFR Part 910), which would have voided most non-competes from September 4, 2024, never took effect: a Texas federal court set it aside nationwide on August 20, 2024 (Ryan LLC v. FTC). On September 5, 2025 the Commission voted 3-1 to drop its appeals and accept that ruling, and on February 12, 2026 it formally removed Part 910 from the Code of Federal Regulations. State law therefore decides whether a non-compete is enforceable.
Frequently asked questions
Are non-competes enforceable in Vermont?
No statute; courts enforce reasonable non-competes. Vermont has no general non-compete statute. Courts enforce a covenant that protects a legitimate business interest and is reasonable in its restrictions. Continued at-will employment can support a non-compete signed mid-employment, unless the employer acts in bad faith (for example, by firing the employee soon after signing).
Did the FTC ban non-competes in Vermont?
No. The FTC's 2024 rule never took effect — a federal court set it aside in August 2024, the FTC dropped its appeals in September 2025 and removed the rule from the Code of Federal Regulations in February 2026. State law controls, though the FTC still challenges some non-competes case by case.
Official Sources
Figures checked against these sources on 2026-10-07Other states
Same category (Enforceable if reasonable): Alaska, Arizona, Connecticut, Delaware, Indiana, Iowa, Kansas, Kentucky
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Not legal advice. Enforceability depends on the agreement's wording and the facts; consult an employment attorney licensed in Vermont.